Panel suggests tweaks in rice procurement strategy of FCI

For boosting India’s non-basmati rice exports, the government needs to ensure that a higher pool of surplus rice is available to exporters by suitably modifying Food Corporation of India’s (FCI) procurement strategies, a high-powered panel of experts on agriculture exports said.

The panel was constituted by the 15th Finance Commission (FFC) to suggest measurable performance incentives for States to encourage agriculture exports as well as to promote crops that can help in high import substitution.

It comprised of senior representatives from the industry, academicians and former bureaucrats.

The panel said FCI is the largest buyer of rice in the domestic market for Public Distribution System (PDS) – approx. 40 million tonnes annually.

And, with the Minimum Support Price (MSP) increasing year on year it is leading to smaller export surplus and uncompetitive pricing in the international market for Indian non-basmati rice.

A reason perhaps why, despite being the world’s second largest producer of rice, both production and exports have been stagnant over the years.

The panel seemed to suggest that excess FCI buying and increasing MSP’S are the major pain points for Indian rice exports which could be addressed through suitable government policies such as price deficiency payment method (Bhawantar Scheme).

The recommendations have come at a time when a section of farmers in one of India's largest cereal growing state of Punjab are on the streets protesting against any move to curtail down MSP purchases.

Rice is among the biggest agriculture exports from India along with buffalo meat and cotton.